OCC Bulletin 2020-95| November 2, 2020
Qualified Financial Contracts Stay Rule: Exemption Order
Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
On September 30, 2020, the Office of the Comptroller of the Currency (OCC) issued an order granting an exemption from the express recognition requirements of 12 CFR 47.4 for certain categories of qualified financial contracts (QFC) entered into by foreign subsidiaries of covered banks.1 As provided in the order, "non-U.S. non-linked" contracts are exempted from the general requirement that a covered bank's covered QFCs contractually recognize the applicability of the stay-and-transfer provisions of the U.S. special resolution regimes.2
Note for Community Banks
The order does not apply to community banks. The mandatory contractual stay requirements in 12 CFR 47 apply only to large, systemically important banks.
The OCC has determined that this exemption is consistent with the purpose of the express recognition requirements in achieving uniform cross-border application of the U.S. special resolution regimes to contracts subject to such authorities. Pursuant to 12 CFR 47.8(d), the OCC made this determination after considering
- the potential impact of the exemption on the ability of the covered bank, or its affiliates, to be resolved in a rapid and orderly manner in the event of the financial distress or failure of the entity that is required to submit a resolution plan; and
- the burden that the exemption would relieve.
Please contact Valerie Song, Assistant Director, or Scott Burnett, Counsel, Chief Counsel's Office, at (202) 649-5500.
Maryann H. Kennedy
Senior Deputy Comptroller for Large Bank Supervision
2 As defined at 12 CFR 47.2, "U.S. special resolution regimes" means the Federal Deposit Insurance Act and Title II of the Dodd–Frank Wall Street Reform and Consumer Protection Act, including their corresponding implementing regulations.